C&C Group PLC (LSE:CCR) shares swung sharply on Tuesday after the Magners brewer reported lower profits, cut its dividend and warned that trading conditions in pubs and hospitality remain difficult.
The shares initially fell almost 7% to below 102p in early trading before recovering some ground, up 0.55% to 109.6p as investors digested the group’s outlook statement and strategic update.
C&C, which owns brands including Tennent’s and Bulmers and also operates the Matthew Clark Bibendum drinks distribution business, reported a 5.7% fall in net revenue to €1.57 billion for the year to 28 February while underlying profit on an EBITDA basis fell 6.9% to €104.3 million.
The company said the earnings decline partly reflected the planned exit of Budweiser Brewing Group contract volumes in Ireland, alongside weaker demand in hospitality markets.
Profit before tax fell 10.9% to €49.8 million, while free cash flow dropped 23.5% to €45.3 million.
C&C said it would cut the final dividend to 3.67 euro cents from 4.13 cents a year earlier. Net debt rose to €121.4 million, with leverage increasing to 1.6 times earnings.
Chief executive Roger White said the group had made “demonstrable progress” over the past year and was now operating from “a more stable platform”.
The company also said it was abandoning its previous “One C&C” strategy in favour of separate operating models for its brands and distribution businesses.
White said: "Having established the best route forward for C&C Group to create value and having done much of the preliminary enabling work required, we now look forward with a renewed focus and drive to deliver the necessary change and improvements we have identified to support our value creation ambitions.
"We will continue to develop the growing C&C Brands portfolio, with our brand innovation pipeline now firmly established. We anticipate a series of exciting brand initiatives and a strong promotional programme across the key summer months."